Correlation Between Skue Sparebank and Exact Therapeutics
Can any of the company-specific risk be diversified away by investing in both Skue Sparebank and Exact Therapeutics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Skue Sparebank and Exact Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skue Sparebank and Exact Therapeutics AS, you can compare the effects of market volatilities on Skue Sparebank and Exact Therapeutics and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Skue Sparebank with a short position of Exact Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skue Sparebank and Exact Therapeutics.
Diversification Opportunities for Skue Sparebank and Exact Therapeutics
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Skue and Exact is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Skue Sparebank and Exact Therapeutics AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exact Therapeutics and Skue Sparebank is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Skue Sparebank are associated (or correlated) with Exact Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exact Therapeutics has no effect on the direction of Skue Sparebank i.e., Skue Sparebank and Exact Therapeutics go up and down completely randomly.
Pair Corralation between Skue Sparebank and Exact Therapeutics
Assuming the 90 days trading horizon Skue Sparebank is expected to generate 0.22 times more return on investment than Exact Therapeutics. However, Skue Sparebank is 4.54 times less risky than Exact Therapeutics. It trades about 0.17 of its potential returns per unit of risk. Exact Therapeutics AS is currently generating about -0.09 per unit of risk. If you would invest 24,795 in Skue Sparebank on November 2, 2024 and sell it today you would earn a total of 5,330 from holding Skue Sparebank or generate 21.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skue Sparebank vs. Exact Therapeutics AS
Performance |
| Timeline |
| Skue Sparebank |
| Exact Therapeutics |
Skue Sparebank and Exact Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skue Sparebank and Exact Therapeutics
The main advantage of trading using opposite Skue Sparebank and Exact Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skue Sparebank position performs unexpectedly, Exact Therapeutics can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Exact Therapeutics will offset losses from the drop in Exact Therapeutics' long position.| Skue Sparebank vs. Telenor ASA | Skue Sparebank vs. Storebrand ASA | Skue Sparebank vs. Orkla ASA | Skue Sparebank vs. Gjensidige Forsikring ASA |
| Exact Therapeutics vs. Helgeland Sparebank | Exact Therapeutics vs. Golden Energy Offshore | Exact Therapeutics vs. Sogn Sparebank | Exact Therapeutics vs. Goodtech |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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